Singapore stocks lift after cooler US inflation sparks regional rally

SINGAPORE – Better news on inflation in the US helped regional markets dig themselves out of the red zone they have been in for a couple of days.

Local investors pushed the Straits Times Index (STI) up 0.9 per cent or 27.46 points to 3,132.12, with gainers easily outpacing losers 426 to 234 on trade of 1.6 billion securities worth $1.4 billion.

It was much the same across the region, especially in Hong Kong, South Korea and Japan where key gauges shot up by over 2 per cent.

Australian stocks had a more modest ascent, rising 1.4 per cent to end at an eight-week high.

The increases came after a turbo-charged session on Wall Street overnight where the S&P 500 jumped 1.9 per cent, its biggest one-day advance since April. The tech-heavy Nasdaq added 2.4 per cent, while the Dow Jones Industrial Average rose 1.4 per cent.

Principal Asset Management said the United States’ inflation data is good news for the Federal Reserve and makes a December rate hike unlikely, but until inflation shows a convincing downward trend, the central bank will likely struggle to mark the peak of its tightening cycle.

Singapore’s banking trio were among the exceptions, however, as any pause in the Fed’s rate-hiking campaign means a cap on their net interest margins.

DBS Bank declined 0.6 per cent to $32.42, UOB was 0.1 per cent lower at $27.31 while OCBC Bank fell 0.5 per cent to $12.88.

Conversely, counters that have been at the receiving end of rising interest rates rallied on the news, with the top seven STI performers being all real estate investment trusts or other property players.

Mapletree Pan Asia Commercial Trust trumped the rest of the STI constituents, emerging as the best-performing counter after surging 6.8 per cent to $1.42.

Yangzijiang Shipbuilding came in at the bottom of the STI performance chart after the vessel maker slipped 1.4 per cent to $1.46.

THE BUSINESS TIMES